Narberth residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
Leasehold premises in Narberth with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Narberth,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Narberth valuers.
Two years ago Jude, started to get close to the 80-year threshold with the lease on his studio flat in Narberth. In buying his property two decades ago, the unexpired term was of no relevance. Fortunately, he recognised he needed to take action soon on a lease extension. Jude extended the lease at the eleventh hour last August. Jude and the landlord ultimately agreed on a premium of £6,000 . If the lease had gone lower than 80 years, the figure would have gone up by at least £1,050.
In 2009 we were called by Dr P Reed who, having purchased a one bedroom flat in Narberth in May 1997. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Comparative premises in Narberth with a long lease were worth £168,800. The mid-range ground rent payable was £60 invoiced monthly. The lease expired on 28 September 2080. Considering the 55 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of fees.
Mr H Howard took over the lease of a studio apartment in Narberth in April 2001. The dilemma was if we could approximate the price could be for a ninety year lease extension. Identical homes in Narberth with 100 year plus lease were worth £235,200. The average amount of ground rent was £45 billed monthly. The lease ran out on 21 July 2091. Given that there were 66 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.